Manitoba Hansard — 26 March 1997 (Sitting 18, 36th Legislature, 3rd Session)

36-3-18

Manitoba — Debates (Hansard)

Third Session - Thirty-Sixth Legislature of the Legislative Assembly of Manitoba DEBATES and PROCEEDINGS Official Report (Hansard) Published under the authority of The Honourable Louise M. Dacquay Speaker Vol. XLVII No. 18- 1:30 p.m., Wednesday, March 26, 1997

MANITOBA LEGISLATIVE ASSEMBLY Thirty-Sixth Legislature Member Constituency Political Atll liation ASHTON, Steve Thompson N.D.P. BARRETT, Becky Wellington N.D. P. CERILLI, Marianne Radisson N.D.P. CHOMIAK, Dave Kildonan N.D.P. CUMMINGS, Glen, Hon. Ste. Rose PC. DACQUA Y, Louise, Hon. Seine River P.C. DERKACH, Leonard, Hon. Roblin-Russell PC. DEWAR, Gregory Selkirk N.D P DOER, Gary Concordia N. D .P. DOWNEY, James, Hon. Arthur-Virden P.C. DRIEDGER, Albert Steinbach P.C. DYCK, Peter Pembina PC. ENNS, Harry, Hon. Lakeside PC - ERNST, Jim Charleswood PC. EVANS, Clif Interlake NDP EVANS, Leonard S. Brandon East N.D.P.

FILMON, Gary, Hon. Tuxedo PC. FINDLAY, Glen, Hon. Springfield P.C. FRIESEN, Jean Wolseley N.D P GAUDRY, Neil St. Boniface Lih. GILLESHAMMER, Harold, Hon. Minnedosa PC. HELWER, Edward Gimli PC HICKES, George Point Douglas N.D P JENNISSEN, Gerard Flin Flon NDP KOWALSKI, Gary The Maples Lib. LAMOUREUX, Kevin Inkster Lib. LATHLIN, Oscar The Pas N.D P LAURENDEAU, Marcel St. Norbert P.C. MACKINTOSH, Gord St. Johns N.D.P. MALOWAY, Jim Elmwood N.D.P. MARTINDALE, Doug Burrows NDP McALPINE, Gerry Sturgeon Creek PC. McCRAE, James, Hon. Brandon West PC McGIFFORD, Diane Osborne :\DP MciNTOSH, Linda, Hon. Assiniboia PC.

MIHYCHUK, MaryAnn St. James N.D.P. MITCHELSON, Bonnie, Hon. River East PC NEWMAN, David, Hon. Riel PC PALLISTER, Brian Portage Ia Prairie PC. PENNER, Jack Emerson PC PITURA, Frank, Hon. Morris p C. PRAZNIK, Darren, Hon. Lac du Bonnet PC RADCLIFFE, Mike, Hon. River Heights PC. REID, Daryl Transcona NDP REIMER, Jack, Hon. Niakwa PC. RENDER, Shirley St. Vital PC. ROBINSON, Eric Rupertsland N.D.P ROCAN, Denis Gladstone PC. SALE, Tim Crescentwood N.D.P. SANTOS, Conrad Broadway N.D P STEFANSON, Eric, Hon. Kirkfield Park P.C. STRUTHERS. Stan Dauphin N D P. SVEINSON, Ben La Verendrye PC TOEWS, Vic, Hon. Ross mere P.C.

TWEED, Mervin Turtle Mountain P.C. VODREY, Rosemary, Hon. Fort Garry P.C. WOWCHUK, Rosann Swan River N.D.P.

863 LEGISLATIVE ASSEMBLY OF MANITOBA Wednesday, March 26, 1997 The House met at 1:30 p.m. PRAYERS ROUTINE PROCEEDINGS PRESENTING PETITIONS Gang Action Plan Mr. Gord Mackintosh (St. Johns): Madam Speaker, I beg to present the petition of Patricia Kuzak, R. Kuzak, C. Boadway and others praying that the Legislative Assembly of Manitoba urge the Minister of Justice (Mr. Toews) to consider using this action plan, the NDP's 18-point plan, to deal with gang crime as a basis for provincial policy on organized criminal gangs.

READING AND RECEIVING PETITIONS Gang Action Plan Madam Speaker: I have reviewed the petition of the honourable member for St. Johns (Mr. Mackintosh). It complies with the rules and practices of the House. Is it the will of the House to have the petition read? An Honourable Member: Yes. Madam Speaker: Yes. The Clerk will read. Mr.

Clerk (William Remnant): The petition of the undersigned citizens of the province of Manitoba humbly sheweth: THAT the increase in violent crimes in Manitoba since 1990 has been more than three times as much as the Canadian average; and THAT crime can only be effectively dealt with through both prevention and suppression; and THAT the tough talk of the Manitoba Justice minister has not been matched with action; and THAT Manitobans want a positive, comprehensive response to crime and gang crime that provides alternatives for youth; and THAT the New Democratic Party has put forward an 18-point plan to deal with gang crime; and THAT this plan is divided into elements focused on both the justice system and families, schools and communities; and THAT this costed plan has been subject to widespread consultation and has been praised as a detailed plan to fight youth crime that is well thought through and constructive.

WHEREFORE YOUR PETITIONERS HUMBLY PRAY that the Legislative Assembly of Manitoba urge the Minister of Justice to consider using this action plan as a basis for provincial policy on organized criminal gangs. * (1 335) TABLING OF REPORTS Hon. Vic Toews (Minister of Justice and Attorney General): Madam Speaker, it is my honour to table the Annual Report Concerning Complaints About Judicial Conduct in 1996. INTRODUCTION OF BILLS Bill 9- The Public Utilities Board Amendment Act Hon.

Mike Radcliffe (Minister of Consumer and Corporate Affairs): Madam Speaker, I move, seconded by the honourable Minister of Government Services (Mr. Pitura), that leave be given to introduce Bill 9, The Public Utilities Board Amendment Act; Loi modifiant la

Loi sur la Regie des services publics, and that the same be now received and read a first time. Motion agreed to.

864 LEGISLATIVE ASSEMBLY OF MANITOBA March 26, 1997 Bill 8-- The Real Property Amendment Act Hon. Mike Radcliffe (Minister of Consumer and Corporate Affairs): Madam Speaker, while I am on my feet I would like to seek leave of the House to again move introduction of Bill 8 because the text of the motion which I moved yesterday was not in order because it was written in English only. I now have a text prepared as required in English and French. Do I have leave, Madam Speaker? students under the direction of Mrs. Susan Delaney. This school is located in the constituency of the honourable member for Osborne (Ms.

McGifford). We also have fifteen Grade 11 students from Fisher Branch Collegiate under the direction of Mr. Cliff Skibinski. This school is located in the constituency of the honourable member for Interlake (Mr. Clif Evans). On behalf of all honourable members, I welcome you this afternoon. Madam Speaker: Does the honourable Minister of *

(1340) Consumer and Corporate Affairs have leave to reintroduce Bill 8? [agreed] ORAL QUESTION PERIOD Mr. Radcliffe: Madam Speaker, I move, seconded by the Minister of Northern Affairs (Mr. Newman), that leave be given to introduce Bill 8, The Real Property Amendment Act; Loi modifiant Ia

Loi sur les biens reels, and that the same be now received and read a first time-or a second time, I guess, a second first. Motion agreed to. Bill 7- The Midwifery and Consequential Amendments Act Hon. Darren Pramik (Minister of Health): Madam Speaker, I would move, seconded by the honourable Minister of Agriculture (Mr. Enns), that leave be given to introduce Bill 7, The Midwifery and Consequential Amendments Act;

Loi sur les sages-femmes et modifications correlatives, and that the same be now received and read a first time. His Honour the Lieutenant Governor, having been advised of the contents of this bill, recommends it to the House. I would also table the Lieutenant Governor's message. Motion agreed to. Introduction of Guests Madam Speaker: Prior to Oral Questions, I would like to draw the attention of all honourable members to the public gallery where we have this afternoon from the Riverview School twenty-three Grades 5 and 6 Regional Health Authorities Public Board Meeting Mr.

Gary Doer (Leader of the Opposition): Madam Speaker, my question is to the First Minister (Mr. Filmon). We have become aware that a certain regional board, specifically the central health authority, has detennined that the board meetings will be held in private. They will not be open to the public. I would like to ask the Premier is this acceptable in tenns of open, accountable government, and will he be instructing his Minister of Health to make all of those regional health boards open to the public? Hon.

Darren Pramik (Minister of Health): Madam Speaker, the Leader of the Opposition raises a very important issue in the operation of regional health boards. Obviously, it is a matter of having the right balance in allowing a board to be able to conduct and do its work and have a free-flowing discussion on issues, while at the same time ensuring that the public knows what is going on and also, I would add, has an opportunity to make representations to that board from time to time in an appropriate manner. I am working now with those regional health boards to try to strike the right balance.

I am aware of the situation in the central health region, and we hope that can be achieved. Mr. Doer: We feel the government failed the test of balance in tenns of democracy when it failed to allow the people of Manitoba to have the balance to elect those boards. We have the imbalance of a patronage- - -

March 26, 1997 LEGISLATIVE ASSEMBLY OF MANITOBA 865 appointed system by the present government, so you have failed the first test of democratic balance. I would like to ask the minister will he instruct the Central Region Health Board and other boards that are contemplating the issue of closed meetings-will he have as a standard that these board meetings must be fully open? The government has said that Manitobans must have more local control to meet their health care needs.

Will he issue those instructions to the regional health care boards so communities, particularly in central Manitoba, will feel that their board is open and accountable as promised by the government but not presently existing in the way the boards are meeting? Mr. Praznik: I think we certainly agree that there has to be the right balance, but the Leader of the Opposition asks his question as if we were operating in a void.

I do not recall any instructions from the New Democratic Party, when they were in government, to every hospital board across this province that every one of their meetings should be totally open to the public when in fact they were administering health care for the people of this province. So for the Leader of the Opposition to say that today just tells me he really is not concerned about finding the right balance but more about making a point that is really not valid. Mr. Doer: We are not making decisions in a void, we are making decisions in the backroom. This government is allowing the government to do so.

We have promised and committed ourselves to elected representatives, democratically elected representatives as recommended by the government's own rural and northern task force. I would like to ask the Premier (Mr. Filmon) will he give us elected regional boards, No. 1, and will he make those board meetings open to the public all across Manitoba? Mr. Praznik: Madam Speaker, let me say very clearly that it is our intention to ensure there is a proper balance in the operation of those boards that allows them to do the work that they need to sometimes do in camera.

That happens from time to time on a number of issues. It happens now with municipal councils. The Leader of the Opposition was part of a constitutional committee with myself that did our deliberations in camera. I do not recall him advocating it should be totally open. We will hope to find the right balance, because the fundamental point he raises about a degree of the public access in knowing what is going on I recognize and support. Surely to goodness, we can find the right balance.

With respect to elections, the bill does provide for that, but I would expect that he would also support, as part of any plan to have elections of those boards-would also come in accountability to the taxpayer with the right to levy a tax to pick up their deficits. I gather that is the position of the New Democratic Party. Pharmacare Income Tax Statements Mr.

Dave Chomiak (Kildonan): Madam Speaker, we are receiving calls from numerous outraged Manitobans, and seniors in particular, who again find out without notice, without any kind of advance discussion from the government, that they have to provide their 1995 income tax assessment forms in order to qualify for their Pharmacare deductibles. We have seniors that do not have those forms. My question to the Minister of Health is how can the minister explain why the government is intruding into the private lives of Manitobans who did their tax forms.

Will the minister advise this House whether or not people will be denied their Pharmacare benefits if they do not provide their 1995 tax assessment notices? *

(1345) Hon. Darren Praznik (Minister of Health): I am aware of this particular issue. Again, it is one of balance. I am advised that our people in the department, in doing checking on auditing of claims last year-and I do not have the exact numbers for the member, but I am sure we will discuss those in

866 LEGISLATIVE ASSEMBLY OF MANITOBA March 26, 1997 Estimates-discovered that in many cases people had provided inaccurate information with respect to their incomes. As I am sure the member would appreciate-and I am not saying that they did it in a fraudulent way sometimes inaccurate information is given. You are dealing with people who may have some confusion in extracting that information from their tax form, and they do give us the right now to access their information through Revenue Canada to check that, Madam Speaker.

This is a much faster and convenient way to determine their income level and hence their deductible. Surely to goodness, the member would not be condoning an administrative system that allowed some people to not receive the appropriate amount of money, because that obviously comes at the expense of others. Mr. Chomiak: Madam Speaker, why would the government dare-and I will table a copy of someone's Notice of Assessment-force Manitobans to provide this sensitive, private, personal information to the government with no checks in place, with no legislation?

Why would the government dare do this without any privacy legislation, without any kind of checks and balances and without any protection from misuse by the government or by any other officials? Why would the government dare do this? Mr. Praznik: Madam Speaker, I know we are going to get into the detailed discussion, but there was a variety of discrepancies, some as high as $9,000 in income, on the audit that was done. Surely the member cannot condone that type of unfairness in the administration of the plan. The member rises today as if this is a new thing.

There are other government programs, both federal and provincial, that require the provision of similar types of information. Madam Speaker, again, all of the regular protections that are there for people apply in this case. It is simply that the accurate amount can be determined. I am sure there are even some cases where people overstate their income and that may affect them. So this is a check to ensure that the system is properly administered. I do not know if the member has an alternative that is more applicable. If he does, I would hope he would offer it. Mr.

Cbomiak: Madam Speaker, the alternative is to restore the universal health care program and the Pharmacare that we had. Madam Speaker. my final supplementary to the minister is the same as my initial supplementary. How can the government dare to ask Manitobans to provide this very sensitive information? In fact, they are not even asking for '96. they are asking for the year before 1995. People do not understand that. How can they ask for this information without protection in place to protect c1t1zens from unlawful or illegal or inappropriate use of their very sensitive tax information?

There is no legislation. no protection. Mr. Praznik: Madam Speaker, I can assure the member that if anyone in the administration of this program misuses this information, that would be an unlawful use of that material. It is provided for one purpose and one purpose only, and that is to determine the eligibility. As an MLA, the member would know from time to time we have constituents whom we help complete forms that require that same type of information to determine their eligibility for other programs. The member talks about universal Pharmacare.

Let us remember that Manitoba today has one of the richest, if not the richest, Pharmacare program in the country. Aboriginal Programs Government Initiatives Mr. Eric Robinson {Rupertsland): Madam Speaker, in the throne speech, this government after eight years in office noted for the first time that there are children living in poverty and most of them are aboriginal. Of course, we welcomed this new insight by this government and hoped that this budget would contain major initiatives in this area and, of course, that did not occur.

I would like to ask the Minister of Northern Affairs whether he could tell this House what plans this government has with respect to the implementation of - -

March 26, 1997 LEGISLATIVE ASSEMBLY OF MANITOBA 867 the Aboriginal Justice Inquiry, the Northern Economic Development Commission, the Hughes report and, also, the Royal Commission on Aboriginal Peoples. Hon.

David Newman (Minister responsible for Native Affairs): Madam Speaker, what I am pleased to respond to is the opportunity to give information as to the kinds of things that are being done pursuant to the report of the Aboriginal Justice Inquiry that are consistent with our multicultural society and our judicial system as it has been but building on the experiences and wisdom of the aboriginal people and also their traditions and values.

One of the things that is going to emerge in the next few days through announcements is a substantial contribution, along with the federal government and others, to what used to be the fly-in sports camp in northern Manitoba. That has been approved and will be forthcoming. Also, in downtown Winnipeg in the core area, there will be a major contribution to a program through the school system dealing with the local gang issue, and that will be announced in the next few days as well. Thirdly, with respect to Child Find, an announcement of funding for a program for aboriginals is forthcoming in the next few days. *

(1350) Aboriginal Justice Initiatives Fund Status Report Mr. Eric Robinson (Rupertsland): I read the '97-98 Estimates, and in the last four years it has been $1 million as far as aboriginal justice initiatives are concerned. This year I noted that the fund that was originally what I described earlier is now referred to as aboriginal and other justice-related issues. I would like to ask the minister to tell this House what action he has taken with respect to the AJI Fund that we have been hearing about for a long time and whether or not it was indeed eliminated from the '97 budget. Hon.

David Newman (Minister responsible for Native Affairs): Madam Speaker, that is probably more appropriately a question for the Minister of Justice (Mr. Toews). However, the monies that I have just referred to funding the programs I have spoken about come out of the budget line for the Aboriginal Justice Inquiry Initiatives. Some of the programs I believe that are being considered for the coming year fall under the ambit of the $1.5-million budget line, and those kind of initiatives will be pursued under that line, as I understand it. Mr. Robinson: My final question is then for the Minister of Justice.

Perhaps the minister could tell us why the word "aboriginal" is not so important at this time, it appears, and, also, what has happened to each of the programs that were funded under the AJI initiatives fund that we knew it as previously. Hon. Vic Toews (Minister of Justice and Attorney General): This government remains committed to ensuring that practical and reasonable programs are implemented in respect of the issues identified in both the Aboriginal Justice Inquiry, in the Hughes report and others. There are very specific areas that we can talk of. Some of the things have been mentioned by my colleague.

Another that I am very proud of is the First Nations Policing Policy in Manitoba, a very important issue, I think, that arose out of the Aboriginal Justice Inquiry to ensure that there is a more representative population in our police forces or indeed in First Nations police forces. I might indicate that, of the 62 First Nations communities in the province of Manitoba, there are 34 which are at or approaching the negotiating stage. Twenty are in the consultation stage and eight, in fact, have signed agreements.

These are specific, concrete proposals that have been implemented, and we are very proud to proceed in that direction. Nelson River Bridge Construction Mr. Oscar Lathlin (The Pas): I would like to ask the Minister of Northern Affairs a question regarding the Cross Lake First Nation. Madam Speaker, in view of the fact that Claim No. 109 of the Cross Lake First Nation, arising from the

868 LEGISLATIVE ASSEMBLY OF MANITOBA March 26, 1997 Northern Flood Agreement, has been adjudicated now twice in favour of the Cross Lake Fi rst Nation for a vehicle bridge on the Nelson River, I would like to ask the minister as to when he will proceed, without delay, to construct the vehicle bridge at the Nelson River, because he has now received two decisions that are in favour of the Cross Lake First Nation for a bridge. Hon.

David Newman (Minister of Northern Affairs): Madam Speaker, I am familiar with that issue, and my understanding is we are awaiting an arbitral award chaired by the arbitrator named in the agreement. That award has not been forthcoming. It would be inappropriate for me to comment on it, but I do understand that an award is forthcoming. I actually visited Cross Lake and saw the situation and appreciated what the need was, and whether or not that is adequately serviced by a ferry or needs $10 million for a bridge is another question. That is the very issue, as I understand it, the arbitrator is deciding.

Madam Speaker: The honourable member for The Pas, with a supplementary question. Mr. Lathlin: Madam Speaker, this is a very serious matter, and I am not even in a joking mood about it, but I would nevertheless ask the Minister of Northern Affairs as to when he will adjust this year's budget and include the costs of the bridge at the Nelson River for Cross Lake. Will he now include the costs of that bridge in the budget? Mr. Newman: The simple answer to that is no, Madam Speaker.

However, the question about the arbitration award, if the arbitration award has come out and I have not yet seen it, I will of course review it and I will make whatever decisions are appropriate in light of that particular recommendation or decision, which I have not seen yet. *

(1355) Regional Health Authorities Elected Representatives Mr. Kevin Lamoureux (Inkster): Madam Speaker, my question is for the Minister of Health. Yesterday I asked the question with respect to regional health boards and when are we going to see elections of regional health boards. The minister today tries to give the impression that his concern is one of taxation rights. My question specific to the minister: is it because of that particular question that we are not seeing elected regional boards? Is that the only reason for the prevention of the government moving ahead? Hon.

Darren Praznik (Minister of Health): First of all, Madam Speaker. virtually I 00 percent of the financing of health care is voted through this Legislative Assembly. We are elected and have that responsibility. If you look at democracy and election. with the responsibilities that come with governance. one of those is also the responsibility to return directly to the taxpayer with the results of your decisions. When the original health authorities bill was put through this Legislature, passed by this Legislature, my predecessor provided in that bill for the possibility of election.

That may come in sometime, but, Madam Speaker, surely the day in which it comes would also have to come the mechanism and the acceptance of a taxation authority to go with that. I have yet to detect a willingness on the part of anyone to see that happen. Mr. Lamoureux: Madam Speaker, will the Minister of Health acknowledge other jurisdictions, such as Quebec, where they do have the election of regional health boards and they do not have taxation rights, and that this is because of the political will?

That is why I ask the minister will he acknowledge that the political will to move towards the election of regional boards just is not there? They would just as soon appoint, as opposed to allowing Manitobans the ability to elect their representatives for health care. Mr. Praznik: Madam Speaker, I also believe in Saskatchewan initially they had elected boards without a taxation authority, and from reports from that particular jurisdiction, they found that it was not that successful of a venture because in these initial stages of setting up these boards there is a lot of work that has to take place.

There is a lot of change of thinking. We are changing the model, the fundamental model in which we deliver health care. - -

March 26, 1997 LEGISLATIVE ASSEMBLY OF MANITOBA 869 Once we are through this very important implementation stage, the opportunity to move to election is certainly there. Madam Speaker, I do not offer opinion one way or another, but let us understand that where elected models are successful, they also have to have a taxing authority. If not, it is very easy to make decisions and then blame the financial consequences on someone else. Hog Industry Taiwan Exports Mr. Neil Gaudry (St. Boniface): Madam Speaker, my question is to the Minister of Agriculture.

I understand Taiwan, a country that accounts for 50 percent of Japan's pork imports, has suspended all of its exports of domestically produced meat products. This offers an exceptional opportunity for Manitoba pork industry, but Saskatchewan seems to be filling this role with their packers signing an exclusive million-dollar contract to provide chilled and frozen pork to Taiwan. The minister has previously stated his objective is to double the size of Manitoba's hog industry, and in fact he removed the monopoly for Manitoba pork in order to accomplish- Madam Speaker: Order, please.

Would the honourable member please pose his question. Mr. Gaudry: Can the minister inform the House if Manitoba packers are going to be announcing similar contracts with Taiwanese firms, or did he miss the boat? Hon. Harry Enos (Minister of Agriculture): Madam Speaker, I want to assure the honourable member for St. Boniface that I was not trying to get on any boat and that the boat in respect to Manitoba pork is sailing along as anticipated and beyond expectations.

I can report to the honourable member that pork production declined by 7 percent in the province of Saskatchewan while ours is still increasing in double-digit numbers. I am aware that corporations like J. M. Schneider, with their $40-million expansion plans, are specifically targeting the Japanese market. While I am on my feet, Madam Speaker, regrettably, this is the case in agriculture, all too often, somebody . else's ill wind is good wind for somebody else.

It is true that the island country of Taiwan is suffering a very serious problem with respect to hog production, and I would expect Manitoba producers, Canadian producers, to take full advantage of it. *

(1400) Domestic Violence Minister's Comments Mr. Gord Mackintosh (St. Johns): Madam Speaker, after years of abuse, we are told, a mother of two finally went to the police and charges were laid. A trial date was set for October, but the accused was acquitted because not a single witness was subpoenaed. The trial went ahead anyway, yet again.

My question for the Minister of Justice: can the minister possibly explain how he could say-and I am interpreting his letter to me-why complain to me, it is not my problem, when it is his department that has conduct of a trial, has to secure witnesses, can seek a stay or an adjournm ent and oversees police procedures? Hon. Vic Toews (Minister of Justice and Attorney General): Madam Speaker, for the member for St. Johns to read in such a gross misrepresentation of my letter to him is simply inexcusable.

I would ask him to table that letter so that the members here can in fact see what I said instead of putting very, very misleading statements before this House. Mr. Mackintosh: Madam Speaker, I will be pleased to table that letter since the victim has come forward and, indeed, is here today seeking justice. I do not have that on me; I will ensure that I table that before the end of Oral Questions. Women's Advocacy Program Mr. Gord Mackintosh (St.

Johns): Can the minister possibly explain why the victim was never so much as told about the Women's Advocacy Program which, according to the former minister, provides legal and other information, emotional support and short-term counselling to women while charges are outstanding against their partners? She never heard about it until we advised her last week.

870 LEGISLATIVE ASSEMBLY OF MANITOBA March 26, 1997 Hon. Vic Toews (Minister of Justice and Attorney General): Madam Speaker, I can look into that specific issue and get back to the member. I want to assure all members of the public that we are concerned about any situation where there is an allegation that justice was not done. In this particular case, the RCMP were asked about the particular situation, and I, in fact, explained the situation to the member for St. Johns in my letter to him.

In fact, in this particular case the RCMP has indicated its role in the situation and I am satisfied in that respect that this was simply an oversight. That does not make up for the hardship for the particular individual in question, but I have to look at an entire system and I want to make sure that the system works for each individual. I am satisfied we are taking the necessary steps to ensure that this kind of situation is not repeated. Domestic Violence Cases Minister's Review Mr.

Gord Mackintosh (St Johns): If that is so, I ask the minister why he has not personally responded to the concerns of the victim, not at all, why he has not apologized, why he has not ensured a change in protocol to the Crown, the police, the Women's Advocacy Program, why he has not reviewed this case to see if charges can be relaid or different charges laid, why he has not even ensured disciplinary action, Madam Speaker. Hon. Vic Toews (Minister of Justice and Attorney General): Madam Speaker, if the member for St. Johns were not a lawyer, that kind of comment would be excusable, but the member for St.

Johns is a lawyer and for him to suggest that as a political official I interfere in the laying of charges is reprehensible. Mr. Mackintosh: I would like to table the letter that was referred to, the letter that avoids the minister's responsibility and accountability, Madam Speaker. Violence Against Women Reduction Strategy Ms. Diane McGifford (Osborne): Madam Speaker, last year 14 Manitoba women were murdered by their male partners, and today a Manitoba woman told the media of an out and out travesty of justice-the one just mentioned by the member for St.

Johns-the dismissal of charges against her violent partner. The Minister of Justice knows very well that his government has not kept the faith with these 14 dead women nor with women, like the one with us today, who are promised justice and then denied it. Since the Pedlar report and the Aboriginal Justice Inquiry are gathering dust while women are battered and murdered, I offer the minister the NDP Task Force on Violence Against Women, and I would like to ask the minister where his commitment is to end violence against women in Manitoba. Hon.

Vic Toews (Minister of Justice and Attorney General): r thank the member for tabling the report. I can assure her that as a former prosecutor. I know where I stand in respect of issues relating to justice for victims, and that is. we in fact are very concemed [interjection] Well, perhaps the member for Wellington (Ms. Barrett) wants to answer the question since she will not let me finish. Lavoie Inquiry Tabling Request Ms.

Diane McGifford (Osborne): Since the report of the Lavoie inquiry scheduled originally for release on June 30 presumably contains recommendations which might prevent murder and abuse, I want to ask the minister when we might expect this long-delayed report. Hon. Vic Toews (Minister of Justice and Attorney General): As indicated, r thank the member for tabling the report, and I will ensure that that report is reviewed to ensure that all necessary and reasonable steps that can be taken will be taken. Ms.

McGifford: Madam Speaker, I asked the minister when we might expect the report of the Lavoie inquiry, not the NDP Task Force Report on Violence Against Women. Mr. Toews: Well, Madam Speaker, if the member is suggesting that I phone up a member of the judiciary and ask about the report, I can tell her very clearly that I will not interfere with the exercise of judicial responsibility. - -

March 26, 1997 LEGISLATIVE ASSEMBLY OF MANITOBA 871 Road Maintenance-Northern Manitoba Tender Process Mr. Gerard Jennissen (Flin Flon): Madam Speaker, my questions are for the Minister of Highways. As the minister knows, I have previously requested detailed information on the proposed privatization of gravel maintenance in rural and northern Manitoba and the job losses for rural and northern Manitoba. Does he finally have this information, including the actual bids for each project? Will he now table each of the bids and tell the House which, if any, have been approved? Hon.

Glen Findlay (Minister of Highways and Transportation): Madam Speaker, I think I understood the member to talk about the tenders to the private sector. Is that right? The tenders have been received, and none of the tenders were accepted. Mr. Jennissen: Is the reason that the tenders were not accepted the fact that they were at least 20 percent higher than they would have normally been expected to be? Mr. Findlay: I will repeat my answer. Tenders are received in an open tendering process. Many people submitted tenders and none were accepted. Mr. Jennissen: What are the plans for the existing equipment and yards?

Are they being sold off, or will they be sold off at garage sale prices? Mr. Findlay: We have in the vicinity of some 80 yards in the province. I am not aware that we are selling equipment from any of the yards. We are certainly doing an analysis of where that equipment can most efficiently be used in the province. It is an ongoing process. Sometimes R.M.s come to us and ask-or former LGDs-for an opportunity to take ownership of that equipment, and we sit down and have those discussions on a case-by-case basis. Louisiana-Pacific Environmental Contamination Ms.

Rosano Wowchuk (Swan River): Madam Speaker, yesterday the Minister of Environment said he did not know where the waste was being deposited, and I should be providing more information. Well, I would like to table the sites that I identified earlier last . week for the minister. Some Honourable Members: Oh, oh. Madam Speaker: Order, please. The honourable member for Swan River, to finish her question. *

(1410) Ms. Wowchuk: Maybe with this map the minister will finally start to understand what is going on. I would like to ask the minister if he just does not know what is going on in his department. Is he completely incompetent by saying yesterday he did not know where the sites were when in fact his department had inspected them on Thursday and Friday of last week? Hon.

James McCrae (Minister of Environment): Madam Speaker, I am very pleased indeed that the conscience of the honourable member for Swan River has finally kicked in today, and she has produced some information that environment officers can use as they search for this pile of bark and wood fines four metres high and two football fields long. We will be very pleased to further inquire. I suspect that, if these sites are not the Louisiana-Pacific sites themselves, they have already been looked at.

As I said to the honourable member yesterday, there are no sites at the present time that are endangering the environment in any way, but we will reinspect and reinspect as long as this honourable member continues to play the games that she does. We will not play games. We will be serious about the environment, but we will not put in jeopardy 400 jobs while we are at it. Ms.

Wowchuk: Madam Speaker, since the minister still appears to be in the dark where these large piles of waste are situated, I would like to table some photographs for him and tell him that these are located on the bank of the West Stable River and ask him how these sites fit in with their plan- Some Honourable Members: Oh, oh. Madam Speaker: Order, please. Would the honourable member for Swan River quickly pose her question because I could not hear it over the roar from the members.

872 LEGISLATIVE ASSEMBLY OF MANITOBA March 26, 1997 Ms. Wowchuk: Thank you, Madam Speaker. Now that I have provided him with the photographs, can the minister tell us how this site fits in with the permission that L-P has been given to use this material for livestock bedding when there are absolutely no livestock in the vicinity of this dump site? Mr. McCrae: Madam Speaker, the honourable member has been playing games with the people of Manitoba and the Department of Environment since February 12 when she first made a complaint.

Since that time, I and the department have been trying to extract information that this honourable member claims to have, and she has brought forward information that is extremely misleading in its nature. At first I thought, well, I have a lot of respect for this honourable member, we are going to follow up her complaints very seriously. That is what we have done and we will continue to do, but the people are a little fed up with gamesmanship. Ms. Wowchuk: I hope that the minister will take seriously the concerns of the people of the valley.

I would like to ask any member of this government if they feel it is acceptable for a government to repair and grass down waterways with money from Farming for Tomorrow and Emergency Measures in one year and then, a few years later, fill it up with chips and waste from the mill and say that is okay for environmental practices. Mr. McCrae: Madam Speaker, the honourable member does what her colleagues do every day, so I suppose I should not be surprised, and that is to substitute her judgment for that of the experts.

I have learned that it is always better to get another opinion than to get one from a member of the New Democratic Party. Budget Accounting Practices Mr. Tim Sale (Crescentwood): Madam Speaker, accountants often say that consistency in financial reporting is as important as mathematical accuracy, but in this year's budget, consistency goes right out the window- Some Honourable Members: Oh, oh. Madam Speaker: The honourable member for Crescentwood, to pose his question. Mr.

Sale: Madam Speaker, consistency has gone out the window in the presentation of this budget to obscure an absurd process of raiding a savings account to pay off a debt. Can the Finance minister explain why on pages 22 and 23 he has changed the presentation from previous years to make a $1 00-million raid on the Fiscal Stabilization Fund look like current income from this year's revenues? And it is done so with a footnote that is about the same size as Progressive Conservative was on its election signs. Hon.

Eric Stefanson (Minister of Finance): Everybody seems to be able to understand this budget and the accounting treatment other than the member for Crescentwood. It is abundantly clear what we have done. We explained it in the budget; I explained it during the Budget Debate, during the budget speech. It has been assessed by all of the investment dealers, the experts in the field. It is very clear that we transferred $1 00 million from our Fiscal Stabilization Fund to offset the approximately $100 million in reduction from the federal government for health, education and support to families.

Obviously, we felt those are important areas of expenditure for government, and we made the decision in this budget year to transfer those funds from our Fiscal Stabilization Fund. Madam Speaker: Time for Oral Questions has expired. ORDERS OF THE DAY House Business Hon. James McCrae (Government House Leader): Madam Speaker, I have heard from some members of the staff of this building certain inquiries about what is happening, and I thought I would sort of reannounce what I announced yesterday and talk a little bit about -

March 26, 1997 LEGISLATIVE ASSEMBLY OF MANITOBA 873 the House business as agreed to amongst House leaders and all members yesterday. The House will sit tomorrow at ten o'clock in the forenoon. It would be sort of a modified Friday arrangement whereby we sit and have Question Period and Routine Proceedings at 10 a.m. and sit right through without a break until we achieve the Interim Supply proceedings, until they have been completed, which we hope to happen before four o'clock. In any event, it is my understanding that that will all happen before four o'clock.

I understand that there is no agreement that we waive private members' hour today. There is no requirement for private members' hour tomorrow, so there would not be that. Then unless something else intervenes, it would be my expectation that after Easter Monday and after a day that House leaders and members will be asked to agree, April 1, when the Manitoba Winter Fair is being held in Brandon, it would be my expectation to seek the leave of the House not to sit on that day. The following day would be my expectation to be proceeding to Estimates.

Of course, in order for that to happen, we need to have a mutually agreed upon list, that is the requirement of the rules between the House leaders as to the order of those Estimates, and then we would go forward from there. So I am not asking for anything at this particular moment by way of leave, that may come a little later, but I thought that it might be helpful to place some of those things on the record. *

(1420) Madam Speaker: As previously agreed, for information purposes, the House will convene at 10 a.m. tomorrow for Routine Proceedings with an expected adjournment time of 4 p.m. provided Interim Supply has been completed. There will be no House sitting that has been agreed to so far for Easter Monday following Easter Sunday. Hon. Eric Stefanson (Minister of Finance): I am pleased to move, seconded by the Minister of Natural Resources (Mr. Cummings), that Madam Speaker do now leave the Chair and the House resolve itself into a committee to consider of the Supply to be granted to Her Majesty.

Motion agreed to, and the House resolved itself into a Committee of Supply to consider of the Supply to be granted to Her Majesty, with the honourable member for St. Norbert (Mr. Laurendeau) in the Chair. COMMITTEE OF SUPPLY Supply-Interim Supply Mr. Chairperson (Marcel Laurendeau): Order, please. The committee will come to order. We have before us for our consideration a resolution respecting Interim Supply.

The resolution reads as follows: RESOLVED that a sum not exceeding $1,694,578,550, being 35 percent of the total amount to be voted as set out in the Main Estimates, be granted to Her Majesty for the fiscal year ending the 31st day of March, 1998-pass. The honourable member for Brandon East, on a point of order. Point of Order Mr. Leonard Evans (Brandon East): On a point of order, Mr. Chairman, we have two days to debate Interim Supply, and there is agreement that it will be passed by tomorrow at four o'clock.

There is always some confusion on both sides as to when members should get up and take the opportunity to make statements or ask questions. My understanding is that we could proceed through some of the early stages up to 11, which is Committee of the Whole, at which time members will have some information and also be given an opportunity to make some general remarks if they wish as well as asking questions of specific ministers, because our members do have some questions of specific ministers and I imagine that would take place at that time as well.

There is some concern-as long as no one is denied the opportunity to make general statements as well as an opportunity to ask specific questions.

874 LEGISLATIVE ASSEMBLY OF MANITOBA March 26, 1997 Mr. Chairperson: Is the will of the House then that we will proceed onto approximately No. 11 ? We will have the opening statements at that time. It is agreed? [agreed] Committee rise. Call in the Speaker. * (1 430) IN SESSION Committee Report Mr. Marcel Laurendeau (Chairperson of Committees): Madam Speaker, the Committee of Supply has adopted a resolution respecting Interim Supply, directs me to report the same and asks leave to sit again. I move, seconded by the honourable member for Portage (Mr. Pallister), that the report of the committee be received.

Motion agreed to. Hon. Eric Stefanson (Minister of Finance): I move, seconded by the Minister of Rural Development (Mr. Derkach), that Madam Speaker do now leave the Chair and the House resolve itself into a committee to consider of ways and means for raising of the Supply to be granted to Her Majesty. Motion agreed to, and the House resolved itself into a committee to consider of ways and means for raising of the Supply to be granted to Her Majesty with the honourable member for St. Norbert (Mr. Laurendeau) in the Chair. COMMITTEE OF WAYS AND MEANS Supply-Interim Supply Mr.

Chairperson (Marcel Laurendeau): The Committee of Ways and Means will come to order, please. We have before us for our consideration the resolution respecting the Interim Supply bill.

The resolution reads RESOLVED that towards making good the Supply granted to Her Majesty on account of certain expenditures for the public service for the fiscal year ending the 3 1st day of March, 1998, the sum of $1 ,694,578,550, being 35 percent of the total amount to be voted as set out in the Main Estimates for the fiscal year ending the 3 1st day of March, 1998, laid before the House at the present session of the Legislature, be granted out of the Consolidated Fund. Will the House adopt the motion? Motion agreed to. Mr. Chairperson: Committee rise. Call in the Speaker. IN SESSION Committee Report Mr.

Marcel Laurendeau (Chairperson of Committees): Madam Speaker. the Committee of Ways and Means has adopted a resolution respecting Interim Supply, directs me to report the same and asks leave to sit again. I move, seconded by the honourable member for Pembina (Mr. Dyck). that the report of the committee be received. Motion agreed to. INTRODUCTION OF BILLS BilllO-The Interim Appropriation Act, 1997 Hon. Eric Stefanson (Minister of Finance): Madam Speaker, I move, seconded by the Minister of Rural Development (Mr.

Derkach), that leave be given to introduce Bill 1 0, The Interim Appropriation Act, 1997 (Loi de 1997 portant affectation anticipee de credits), and that the same be now received, read a first time and be ordered for second reading immediately. Motion agreed to. SECOND READINGS Bill tO-The Interim Appropriation Act, 1997 Hon. Eric Stefanson (Minister of Finance): I move, seconded by the Minister of Rural Development (Mr. - -

March 26, 1997 LEGISLATIVE ASSEMBLY OF MANITOBA 875 Derkach), (by leave) that Bill 10, The Interim Appropriation Act, 1997 (Loi de 1997 portant affectation anticipee de credits), be now read a second time and be referred to a committee of this House. Motion presented. Hon. Eric Stefanson (Minister of Finance): Madam Speaker, I move, seconded by the Minister of Urban Affairs (Mr. Reimer), that Madam Speaker do now leave the Chair and the House resolve itself into the Committee of the Whole to consider and report of Bill 10, The Interim Appropriation Act, 1997, for third reading.

Motion agreed to, and the House resolved itself into a Committee of the Whole to consider and report of Bill 10, The Interim Appropriation Act, 1997 (Loi de 1997 portant affectation anticipee de credits), for third reading, with the honourable member for St. Norbert (Mr. Laurendeau) in the Chair. COMMITTEE OF THE WHOLE BilllO-The Interim Appropriation Act, 1997 Mr. Chairperson (Marcel Laurendeau): Order, please. The Committee of the Whole will come to order please to consider Bill 10, The Interim Appropriation Act, 1997. Does the honourable Minister of Finance have an opening statement? Hon.

Eric Stefanson (Minister of Finance): Yes, I do, Mr. Chairperson, some very brief opening comments. Bill 10, The Interim Appropriation Act, 1997, is required to provide interim spending and commitment authority for the 1997-98 fiscal year, pending approval of the 1997 Appropriation Act. The amount of spending authority requested is $1,694,578,550, being 35 percent of the $4,841,653,000 which is the total sums to be voted as set forth in the 1997-98 Estimates of Expenditure. This amount is estimated to last until approximately the end of July 1997. Mr.

Chairperson, the amount of future commitment authority included in this Interim Supply bill is $100 million. This authority provides for the commitment of expe nditures to ensure completion of projects or fulfilling of contracts initiated but not completed during the fiscal year ending March 31, 1998. Expenditures for these commitments may not be made in the fiscal year ending March 31, 1998, unless additional authority is provided. Just looking very briefly at the sections of the bill, Mr. Chairman, I have touched on Sections 1 and

Section 3, I have also touched on.

Section 4 stipulates that once another Appropriation Act is passed, any funds expended or committed under the authority of this Interim Appropriation Act will be deemed to have been made under the authority of the subsequent appropriation act.

Section 5 simply affirms that money expended under the authority of this act must be duly accounted for. Mr. Chairperson, you may have noticed that Bill 10 is different from previous Interim Appropriation Acts. This is because various provisions are now covered by Bill 55, The Financial Administration and Consequential Amendments Act, which was passed during the last session of the Legislature. As a result, a number of sections included in previous Interim Supply bills are no longer required and have been excluded from the 1997 Interim Appropriation Act.

Provisions that are no longer required in an Appropriation Act are the limitation on expenditures in any appropriation to the amount included in the Estimates of Expenditure; the direction to include expenditure authority for future years commitments in the fiscal year in which the actual expenditure will take place; and the authorization for the payment of liabilities accrued from previous fiscal years; as well, authorization to transfer expenditure authority from enabling appropriations to departmental appropriations for the same purpose.

This includes the Canada-Manitoba Enabling Vote, the Sustainable Development Innovations Fund, Justice Initiatives and Internal Reform, Workforce Adjustment and General Salary Increases, also authorization to proceed with expenditures on projects for which an agreement with Canada is anticipated but not yet signed and finally authorization to make expenditures in

876 LEGISLATIVE ASSEMBLY OF MANITOBA March 26, 1997 anticipation of recovering the funds from other appropriations. * (1 440) Mr. Chairperson, with these comments I commend the bill to the members of the committee. Mr. Chairperson: I thank the honourable minister for his opening statement. Does the critic for the official opposition party, the honourable member for Brandon East, have an opening statement? Mr. Leonard Evans (Brandon East): Mr.

Chairman, I thank the minister for the information on the Interim Supply bill, noting that he is asking for an amount that is about equivalent to 35 percent of total spending to bring us up more or less to the end of July, and I am sure hoping he is hoping that at that point all the Main Estimates will have been passed, but who knows? One never knows. At any rate, what the minister is asking for I believe is customary. It is the probably the normal, I have not checked back on the records, but I imagine it is about the normal amount that is being requested by way of Interim Supply.

It is an old tradition to enable governments to pay their bills while they are awaiting approval by the Assembly of total spending. I just take the opportunity to point out that this exercise of approving government spending as well as taxation of course is very fundamental for democratic institutions.

The British parliamentary system evolved into a democratic system because the Crown, the King, the Queen of years gone by in Britain needed the authority, needed the approval eventually of the people through their elected representatives, and to get that authority it required a meeting in the Parliament, and this ensured each year that representatives of the people, however they may be described at that time, members of Parliament, the House of Lords or whatever, would gather to review the requests of the Crown.

Today, the reason we are essentially gathered-! know legislation can be important from time to time-but the essential reason is the approval of spending Estimates. I believe it was the late Douglas Campbell who was once reported as saying, well, once you get your money approved, fine, let us get out of here and close up shop and carry on. Mind you, I believe when he was Premier in his government their main thrust was to maintain things. There were not very many initiatives. So his main concern was getting approval of monies rather than bringing in legislation for new programs.

So this is the basic element in our democratic procedures and practices. It ensures the annual meeting of our Parliaments. I cannot help but notice looking at the budget document that of the 10 years that is reported in this document, the 1997 budget document, that seven out of those 10 years showed budgetary deficits. Of course. the one in 1992-93, however you want to measure it. either by 566 or close to 300.25. three-quarters of a billion dollars, was the largest in the history of the Province of Manitoba.

So it is only the last three years that the minister has been showing surpluses. that this government has been showing surpluses. only three out of the last 10 budgets that have been submitted by this government for approval by the Legislature. What it tells me is that the financial picture has not always been that strong in the province, that our revenues have not increased as rapidly as we would have liked them and, indeed, I know on this side we are very critical. The government has curtailed spending and we look at the numbers and we sometimes forget that these numbers are the nominal numbers.

They are not adjusted for inflation. When you take inflation into account, you will see that there has been real cutting of program monies by this government. We see it of course in the cutbacks of the school system, cutbacks of the health system, cutbacks in social services. In alJ kinds of ways we see that there have been reductions in program spending by the government. In spite of that, the government has shown deficits in seven out of 1 0 years, and that is simply because their revenues have not improved that drastically. They have not improved very much at all.

As a matter of fact, in some years you see the total revenues actually declining. The year 1992-93, for example, was an absolute decline from the previous year. I believe it was a decline, a quite significant decline of 5.4 percent. In fact, the minister is even showing declines this year. I would like to make another comment, though. Having observed that we have had deficits shown in -

March 26, 1997 LEGISLATIVE ASSEMBLY OF MANITOBA 877 seven out of 10 years, nevertheless that bottom line is very elusive because of the existence of funds, the Fiscal Stabilization Fund, and then we had the lottery fund and goodness knows what other pots of money that we put money in and out of and therefore show a bottom line that one does not always have confidence in. As we have said many a time, the '88-89 number could have been a surplus, but the minister was showing a deficit.

The point I am making is that mainly because of slow economic growth our revenues have not been as buoyant as anyone would like them on either side of this House, and I think that is one of the reasons that the government continues to, most of those years, show deficits. In the process, of course, when you have deficits the debt increases, and I know members opposite are forever critical of the debt increasing under the former NDP government and, even though there were some very good reasons for that, nevertheless, we cannot forget that the debt has increased under this government as well.

In 19 88-89 the debt was roughly $10.6 billion. Today it is about $12.7 billion. That is an increase of $2. 1 billion in debt. We have increased the debt in Manitoba by $2.1 billion in that period of time, and you can see it in many ways. You could look at those figures as they are shown in the budget document, in per capita terms as well, dollar per capita. In 1988-89, the total net debt was $9,580 per Manitoban, per person, and today it is $11,023, so the fact is that Manitobans do have a higher debt burden today than when this government took office.

There are reasons for that, but that is the fact, and members opposite have to be reminded of the fact that this has occurred. In this particular budget, I know much has been made PR-wise of tax changes. I know the government has been appealing to the business community to point out that various exemptions have been increased and payroll exemptions have been increased and so on. Indeed, there has been some millions of dollars provided for those purposes, but when it comes down to it I would like to observe that we are talking in the order of $31.4 million.

This is the annualized or full year impact of 1997 tax changes, relatively minimal in the total spectrum of things, in the total picture of things; $31.4 million is still a relatively modest amount of money when you are talking about a budget of this size. I cannot help but remark that although the business community was pleased to see the exemption increased to $1 million, allowing more small enterprises to be exempted from this tax, I cannot help but take the opportunity to remind the government that that was not the commitment made by the then Leader of the Opposition. The now Premier (Mr.

Filmon) of this province was categorical and clear, also made by the official opposition Finance critic at the time, that a Conservative government would eliminate the payroll tax, not increase exemption levels, but totally, absolutely eliminate it. You know, shades of Jean Chretien and the GST. It is very easy to go back to Hansard and look at these statements, not made on one or two occasions but on many occasions, that a Conservative government would eliminate the payroll tax. The payroll tax is still with us.

It is still a very significant tax in terms of the amount of revenue it brings into the Province of Manitoba. As a matter of fact, it is well over $200 million this year. In fact, it is going to be higher than last year. Last year, the '96-97 budget, the levy for the health and education tax, otherwise known as the payroll tax, brought in or was estimated to bring in $206.5 million. This year it is estimated to bring in $209.4 million. I wonder if the director of this federation of small business or such groups are aware of the fact that the government is going to take even more by way of payroll taxes.

That tax was put on for a good reason of course, and the fact was that the government of the day wanted to ensure that there were sufficient revenues to maintain a good health care and a good education system, and that is indeed why it is been called a levy for health and education. *

(1450) I might note that other provinces have engaged in this type of taxation as well, so I am not criticizing the existence of the tax, but what I am criticizing is the fact that the government when it was in opposition said one thing, and now that it has power and it has been in office for many years, since 1988, has done something

878 LEGISLATIVE ASSEMBLY OF MANITOBA March 26, 1997 else. It has expanded the exemption levels, raised exemption levels, but that is something that our government did on occasion and would have done as well. I am sure we would have wanted to raise the exemption levels to ensure that as many small businesses would be exempted from that as possible. If you go back to the records, you will see there was a raising of the exemption levels, and I have no problem with that. I have no problem with that. What that tax does do, Mr.

Chairman, is bring in large sums of money from certain national corporations, certain federal government departments and Crown agencies, which is quite substantial, and I do not think the minister or any government, any party in government could give it up, considering the fact that our other revenue sources are not as buoyant as we would like them to be. We continue to be helped by the federal government by way of federal transfers, although the total for this year is down from last year.

The minister is estimating $1 .5 5 billion this year compared to $1 .7 billion last year, and there are various reasons for that. I guess it is the system that we have established. There are the cutbacks, of course, by the federal government that we all criticize in this House, which we are not happy about. On the other hand, the federal government will argue, as they have done in the past, that there is such a thing as the transfer of tax points to the provinces, and this, indeed, has made up for those direct transfer cuts.

Also, there is this phenomenon called income bracket creep that helps all governments in terms of collecting more income tax from citizens. Just before I close, I just observe again that, when the economy is strong, we do well. The Minister of Finance, whoever he or she is at the time, should be very happy because a strong economy provides the basis of a good solid budget and allows the government of the day to do many things when revenues are increasing.

I was fortunate in being in a government back in the '70s that was in that position where our economy was strong, our revenues were strong, and we were able to bring in many important programs to help the people of Manitoba. I would not take the time to enumerate all of them, but there were some very significant programs that have benefited Manitobans and are continuing to benefit Manitobans that were brought in at that time. In fact, the one has continued to this day, and that is the legislation that provides for the sharing of revenue with the municipalities that the Minister of Rural Development (Mr.

Derkach) referred to recently in a statement and the Minister of Urban Affairs (Mr. Reimer). We set up a procedure at that time to alleviate the burden of the municipal taxpayer. That, I am pleased to see, still continues, but that is something that began at that time along with the property tax credit system.

Those two combined went a long way to easing the burden of taxes, in addition to other special grants that were made to certain municipalities, including the City of Winnipeg, across the-board grants to assist the major urban centres, especially Winnipeg. to cope with problems it has because of the nature, of the size of the city and its nature and its importance in the province of Manitoba. So you can do a lot if you have buoyant revenues. Today, our economy is relatively strong.

It has been growing recently and we should all welcome that. but we cannot be too complacent and we should always be aware of the fact that there is such a thing as a business cycle, an economic cycle. It goes up and it goes down. We have been on the upswing recently. I am not the one who is looking for a downturn, but a downturn inevitably comes and it will have an impact. I think probably '92-93-1 do not have all the data here-but I think a drop in the economy around that time certainly was one of the contributing factors to the drop in revenues in '92-93 from '91-92.

Having observed that the economy has been better than it has for some time, nevertheless, there are a lot of features of the economy one should be concerned about, the fact that our real wages today compared to 1988 are lower than they were nine years ago. In other words, the real income of people working in Manitoba, according to these figures, the average industrial aggregate weekly wages, when you take account inflation, the real wage level is lower today than it was in 19 88, meaning the purchasing power of these individuals has actually declined.

There are other disturbing features as well of the economy, and one in particular that stands out is the housing starts, the new residential construction. The housing starts used to be very much higher than today. I know we are bragging that there has been an increase recently, but it is an increase of a pretty minimal amount. - -

March 26, 1997 LEGISLATIVE ASSEMBLY OF MANITOBA 879 At the present time, we are looking in the order of between 1, 000 and 2,000 starts ,if we are lucky, but back in 1987 we were at 8, 17 4 starts. Far greater than the number today. In fact, in the '80s, there were considerably three or four times the level of housing starts today, and one should ask the question why? Why is the housing, the new residential construction industry doing so poorly in the province of Manitoba?

Another disturbing feature is when you look very closely at the figures, you will see that we seem to have shrunk within the national economy since the government has taken office. In 19 88, compared to 1996, which is the last year we have available, we can see that our percentage of the national job pie has shrunk. I do not have all the numbers with me, but they are available. I have looked at them in the past.

You can see where the national employment pie, if you will, we have a smaller piece of that pie because relatively speaking we have fewer jobs in Manitoba relative to the rest of the country than we had in 19 88, and the same can be said for some other aspects of our economy. So I am saying we cannot be complacent. We should be very realistic about the economy that we are living in, and we ju st have to try harder.

I also have to observe that in many ways, while the Province of Manitoba or any provincial government does have some bearing on the macro-economic situation, certainly the spending of a provincial government does have an impact on the economy. If you have deficit spending, that is very stimulative. If you have surplus spending, you tend to dampen the economy. That is the reality.

If you have huge surpluses, any government of any party, you withdraw purchasing power, you are withdrawing money from the economy and that does have a dampening influence. * (1 500) Conversely, the deficit spending that goes on does stimulate an economy and, ceteris paribus, everything else remaining equal. I know there are a lot of other factors one could discuss but basically this is true. This is one reason why the previous NDP government had some deficits in the early '80s, because we were confronted with a very serious recession in '82-83, thereabouts.

One way to help provide jobs for Manitobans and to get the Manitoba economy going which we did was through some deliberate deficit spending which did find more dollars going into specific programs that helped Manitobans and helped Manitoba business, residents and businesses and farmers through those programs that we financed at that time under the Manitoba Jobs Fund. I make no apology for that, but the fact is that we are-and that is the interesting point, that when the government did have its deficits for those years, that it was indeed in a bit of a stimula tive position.

At any rate, the revenue situation probably has never been better. We have to recognize that we are benefiting from the relatively buoyant economy in the United States, a very robust economy, which has been importing goods from Canada and particularly goods for Manitoba, so our Manitoba exports are up. We are benefiting from a relatively low interest rate, and I am pleased that the Bank of Canada so far has not seen fit to follow the Federal Reserve lead in the United States, where I believe there has been an increase of one quarter of 1 percent, which is unfortunate, but we are benefiting, Mr.

Chairman, from the relatively low interest rate regime. Some people would argue that it is not low enough because, in real terms, it is not that low because, if you take the difference between inflation and the rate of the interest rate, you look at the real rate of interest, and it is not as low as it could or should be. At any rate, when you combine these, when you look at these factors plus a relatively cheap Canadian dollar, then you see the reason why we have been doing better in Manitoba.

While some of the measures here may help business create jobs, I would think that they are relatively marginal, relatively minor compared to what would happen if we had, for instance, an increase in the value of the Canadian dollar, which could happen. If certain other conditions occur where the government feels that it is necessary to protect the dollar we might see the interest rate go up and, if interest rates go up, it is going to cause the economy to slow down, other things remaining equal, if that ever can be.

So let us hope that some of these major factors that have benefited us continue so that our economy can continue to grow. So those are some general remarks we make, Mr. Chairman, by way of opening, and I think members on

880 LEGISLATIVE ASSEMBLY OF MANITOBA March 26, 1997 this side have some specific questions of specific minis ters I have some specific questions as well. So I wonder if I could start out with ju st a couple of questions and then maybe some of my colleagues would like to have the opportunity to ask questions of other minis ters. Then we could carry on from there. I am wondering ifthe Min ister of Fi nance, if l could ask a question then, Mr. Chairman, could comment on the signi ficance of the transfer of tax points from Ottawa.

I know there is information in here about the actual cuts of the specific transfers in health and social services, but what is the situation, I mean, how many tax points, I know it is around somewhere, but I am asking the minister, what is the situation of the transfer of tax points from Ottawa to the Province of Manitoba? What points are we talking about and what kind of revenue are we talking about, and does that offset what is perceived to be a cut in those transfers? Mr.

Chairperson: As previously agreed, then this is where we will move on to the questioning? [agreed] I just wanted to clarify that because there is nobody back there for opening statements. Mr. Stefanson: Mr. Chairman, the issue of tax points of course is the argument that the federal government tries to utilize as their ju stification for the massive withdrawals in cash funding for programs to the provinces, and it is certainly one I do not buy at all for a couple of reasons.

Fir st and foremost, those tax poi nts that are talked about were transf erred back in about 1976, I believe, '76-77, so we are talking 20 years ago, at a time when if you look at the cash support we were at levels of approximately 50 percent. Certainly welfare was 50 percent, support in other areas of health and post-secondary education was at 50 percent. So not only this government but previous government started eroding the cash support levels so that today we are down in the vic inity of, and I can certainly get the exact percentage, but we are down in the vicinity of about 30 percent.

So it is one I do not accept. Those tax points were transferred many years ago for a particular reason at that point in time. For the federal government today to try and be taking credit for those tax points is unacceptable.

Even if one were to accept their arguments, that is where I am seeing if I have some-even if one were to accept those arguments, which I do not at all, the increase in revenue from '96- 97 as a result of tax point growth is about $20 mill ion, as a result of the growth for those tax points that were transferred year over year, comparing that to a $10 0- million reduction for Canada Health and Social Transfer and another, I believe, approximately $30 milli on, as a result of the equal ization formula, which as we know is formula driven. (Mr.

Peter Dyck, Acting Chai rperson, in the Chair) So I guess the answers to the questions are, the tax points are not in any way offsetting the reductions in cash transf ers. I do not accept that as a valid argument to begin with. If you want to accept that argument and then go back all the way to 1977 and let us track the financial impact, you will see that the erosion of cash has been extremely significant over that period of time. I guess the most important thing for me is. when you look at the federal budget, the tax points in terms of the impact on the federal budget today have no impact.

They have nothing to do with the federal budget. The member for Brandon East seemed to be almost defending the federal Liberals. I think I am interpreting that incorrectly, because I have heard some of his comments about the decisions and priorities of the federal Li berals. The concern I have is, budgets are about priorities. We argue that in this House on a regular basis. If you look at the federal budget, 70 to 75 percent of their reductions in expenditures have come from transfers to provinces for health and post-secondary education.

The majority of the reductions in their expenditures are coming in that area. That is in complete contradiction with what we believe in and I think other members in this House believe in, certainly with what Manitobans believe in and Canadians believe in. They tell us time and time again, the areas of greatest importance are health and education. Look at the federal budget. It is going in the complete opposite direction. They are merely getting their deficit under control on the backs of provinces.

Thank God many provinces in Canada have had their finances under pretty good control and are able to absorb some of that. If it was not for that, we would be - -

March 26, 1997 LEGISLATIVE ASSEMBLY OF MANITOBA 881 in just as big a mess as we were ten years ago, except it would be shifting between levels of government. I hope I have mostly answered the question. The growth from '96-97 and '97-98 in dollar amount as a result of those tax points, even if you accept that bogus argument from the federal government, is $20 million. It does not come anywhere near from of fsetting the massive cash reduction. As I say, if you look at their budget, those tax points have no impact. How they are getting their deficit down is by elim inating these cash transfers.

They are not looking at the other 80 percent of their expenditures in terms of trying to find efficiencies, trying to set the right priorities. They are taking an easy, shortsighted way to get their deficit under control, and that is to offload onto provinces. I think it is wrong. I think it does not meet the priorities of Manitobans and Canadians. It certainly does not meet the priorities of our government and I believe some other members in this House. *( 15 10 ) Mr. Leonard Evans: I happen to agree with what the minister has just stated. I was not defending this particula r action.

I was really inquiring as to the amount of money. He has given us that information. Maybe it is because I have not looked that hard, but I have not seen that type of information. It is good to have that. It is true that the federal government has offloaded in big time, big way, onto the backs of the provinces. It has hurt health and education programs across the country. Some provinces in particular are going to be extremely di sadvantaged. I think of some of the Maritime provinces, Newfoundland in particular, but all of us, all of the provinces are being hurt.

If I can ju st take a point to mention again my exasperation at the federal government not taking a lesson from history and trying to cope with the debt by using the Bank of Canada, I have mentioned this once before, I believe, to the mini ster. I do not know whether the Minister of Fin ance (Mr. Stef anson) is aware, but in 1976, the amount of federal debt held by the Bank of Canada was ju st over 20 percent, in the order of 20 to 21, 22 percent, in that order. This is history, I suppose, but it is important history, 1976. Today it is down to 5 percent.

Now, for various reasons, they decided not to hold as much, and this occurred over a period of time. But that diff erence amounts to billi ons of dollars, several billions of dollars in interest a year, and it seems to me that, instead of making the commercial banks of this country rich, because commercial banks hold the biggest chunk of that debt-they are getting interest on the debt-it seems that Canadians would be far better served if we went back just to where we were in 1976. This is not some radical proposal that has never been done before. In 1976 the bank held a little over 20 percent.

Now why can we not move that way, not overnight but over a period of a few years? That means that the government of Canada would have virtually interest-free debt of a certain amount, and the commercial banks would not get as much, or whoever. It is mainly the commercial banks that are holding the federal debt. There are other players in there as well. There are indivi duals and there are other financial institutions, but it seems to me this is a real way that the government can ease the burden instead of cutting back to the provinces, which translates off into cutting back in health care and education.

Let us cut back in what amounts to transfer payments, interest transfer payments, to the commercial banks of this country; and, instead of the commercial banks financing all, or 95 percent, of the debt, let more of that be financed by the central bank. For those who say, well, central bankers will be printing money, please, the commercial banks are printing the money right now.

They are the ones, the commercial banks, that when the federal government gives them an IOU, namely their bond, without requiring any assets, without requiring a nickel of assets, can create the credit equivalent to that debt instrument, that bond. It virtually is a creation of money or the printing of money, if you want to use that term, by the commercial banking system. So what I am suggesting is rather modest. Instead of 5 percent, why do we not move up over a period of years? I am saying this now because I would like to see our Minister of Fin ance (Mr.

Stefanson) go to a federal provincial conference of Fi nance ministers and urge this because it is a way out. It is a way out. The people who will suffer will be the banks, I suppose, the organizations, because they will not make as many bill ions of dollars of profit, but who will benefit will be . all Canadians because we will not have to cut back so much on our social services or health care or education.

882 LEGISLATIVE ASS EMBLY OF MANITOBA March 26, 1997 Having said that, I agree with, as I said before, the observations of the minister, and it is a tragedy that our federal system is being undermined by this. It seems to me that, if you want to talk about Canadian unity, one of the fundamental ways to ensure Canadian unity is to make sure that all the provinces are treated fairly and that there is this proper equalization and that there is this sharing of these financial burdens through the central government.

One of the reasons I opposed Meech Lake personally was because I saw that as a move to undermine this role that the federal government should be playing in protecting national programs of health and education. (Mr. Chairperson in the Chair) I wonder ifl could just go back to the specific budget now and ask why the minis ter chose to do the way he did, allocate $10 0 million to school and hospital debt.

It seemed to me this was done as an interim step between the last budget and this budget, and it has been shown as a footnote-correct me if I am wrong-as $1 00 miilion towards revenue, and there was some reference made- An Honourable Member: Pages 22 and 23. Mr. Leonard Evans: -on pages 22 and 23 . Okay, under the Fin ancial Review, Note 2. It includes $10 0 miilion off from the Fiscal Stabilization Fund. You are putting it in there by way of, into collections by way of, a note there rather than showing it as a transfer under debt reduction transfer line, which is relatively new, incidentally.

It is interesting you are now using that terminology, because previously-it seems to me previously we had specific reference to the Fi scal Stabiliz ation Fund. Now we have a general terminology, deficit reduction transfers, and I guess that is supposed to include Lotteries as well as Fiscal Stabil ization, but could the minis ter comment on why he has done it this way? Mr. Stefanson: This is picking up on I guess the last question in Question Period today. If the member for Brandon East is to look on page 15 of the budget document under the Financial Review and Statistics, he will see a

summary of all of the revenues of the provincial government, and going down, he will see near the bottom of the page the Fi scal Stabiliza tion Fund, Allocation in Support of Social Programs, $10 0 million. As I indicated in a response to a question today, this money is drawn across from the Fiscal Stabiliza tion Fund to directly offset the federal reduction in support through the Canada Health and Social Transfer. So that is the rationale for the draw of the $10 0 million.

It equates to the same $10 0 million that has been reduced from Ottawa for CHST and is shown as a separate line item on page 15 of our budget. As he mentioned, on pages 22-23 of that same section, we do show it as one of the items under the Manitoba collections, but for comparative purposes so that one has a better sense of comparing the '97-98 to the previous years, we do footnote that the $10 0 million from the Stabilization Fund is in that account. and that is really done so that when you are comparing) ear over year, you would realize that that $10 0 million is only in '97-98.

There is no draw across in previous ) ears. So the rationale is to offset the federal reductions. That certainly is something that has received the support, I believe, of Manitobans. By transferring the $10 0 millio n, we are able to maintain, in fact enhance, our levels of support for health and education and suppor t to families even though this funding from Ottawa is directly for those areas. I mean, I think we should not forget that the CHST is directly for health, post-secondary education and support for families.

That is the objective of the funding, and the federal government has reduced that by a $10 0 mill ion. We made the conscious decision in this budget year to transfer the $10 0 million from the stabilization account. We said during the budget that this is very much a bridge, that by drawing it this year, we believe that through revenue growth in our own source revenues for 1998 that they will offset this $10 0 million moving forward, so it is not as though we are building this requirement into each and every budget year, because that is something you should not do.

You should not take a savings account and build it into your ongoing requirements. We are doing that. We are using it on a one-time-only basis to bridge us through to 1998-99. As I say, we think that is the right thing to do, to maintain and enhance support in those important areas, - -

March 26, 1997 LEGISLATIVE ASS EMBLY OF MANITOBA 883 and we believe it has the support of Manitobans. It is certainly something I heard continually through our Budget Debate, to do that, to continue to support health and education. We are fortunate we have the savings account, the stabiliz ation account, and we are able to do that. I spoke very clearly to that issue in the budget. I have talked about it publicly, whether it has been through the media or at different events or organizations.

I think all Manitobans understand what we have done and why we have done it, and I believe Manitobans support what we have done. * (1 520) Mr. Leonard Evans: Well, basical ly, it seems to me the way it has been done is mainly a PR move in saying, well, this $10 0 million is for health and education or whatever. The fact is, the bottom line would have been the same if that $10 0 million was shown as a deficit reduction transfer as it had been in previous years.

In previous years, there have been monies shown, $200 milli on in '92-93 and again $30 milli on in '93-94, $14 5 mil lion in 1995-96, and I do not see-I mean, ba sically, it is monies out of the Stabiliz ation Fu nd which helps the general Treasury. Frankly, I do not believe it is good public financing to say, well, we are going to collect X dollars through this tax revenue for specific program Y over here, and then we are going to collect these taxes over there for program X.

The fact is that the best type of public financing is to collect revenues whichever way you decide, through whatever tax mechanisms or fees or whatever structure you want to set up. Those revenues go into the general Treasury and then governments, having obtained those revenues, make a decision as to how those dollars will be spent program by program, department by department, depending on the priorities of the government of the day.

So to say, well, we will take $10 0 milli on, and we will earmark it for health, education, just does not ring true to me because even though it does assist in that area, frankly it is revenue that is being applied; it is being made available to the Treasury by a draw from a fund. In the past, as I have said, you have drawn from the Fis cal Stabil ization Fund, and you have not said you have used it, say, in 1995-96, you could have I supposed argued then, well, we are using some of that or all of the $14 5 million to maintain the health care system to the best of our ability. An Honourable Member: Hi ghways. Mr.

Leonard Evans: Highways or whatever. At any rate I jus t do not appreciate this type of footnote and this type of accounting. It seems to be it is more PR accounting than anything else because you could have footnotes in every year almost when you are drawing from a fund, Mr. Chairman. At any rate, I am just going to ask another question. I think my colleague from Crescentwood has a couple, and then I believe-this is just a point of order, Mr. Chairman-the acting leader of the Liberal Party (Mr. Lamoureux), second opposition party, would like to make some remarks.

I will just ask one more for the time being, that is the Debt Retirement Fund deposit, first time ever, $75 milli on. Could the minis ter please elaborate on ju st how is this going to happen? When will this happen precisely? It will be in the new year, but could he give us a little more detail, a bit of elaboration of the technical process that is involved in this first time ever methodology here? Mr. Stefanson: Mr. Chairman, the member for Brandon East will recall in our 1995 budget we introduced the balanced budget legislation. We also introduced the Debt Retirement Fund and the

schedule that shows us elim inating our tax supported debt in approximately 30 years. That

schedule showed making our first payment against the debt starting in this fiscal year. The need for a Debt Retirement Fund is primarily because of the matching when different bonds come due in terms of when we would want to retire those individual bonds. So it is really like a sinking fund I guess is the best way to describe it. The Debt Retirement Fund is really like a sinking fund, and . within up to a maximum of five years we draw from that account and pay off bonds. So we have the

884 LEGISLATIVE ASSEMBLY OF MANITOBA March 26, 1997 flexibility to draw every year, to draw every couple of years, or up to a maximum of fives years, but up to no more than five years you have to make a payment out of that fund.

So starting in this year, during 1997-98, we will make a payment into that fund, and depending on a whole series of issues, what bonds are coming due, what we can borrow money at, what the projections are for future borrowing, and all of those kinds of things, really the whole issue of debt management, and we will make a decision whether or not we actually pay it against a bond immediately in this year or whether we leave it in the fund allowing it to accumulate interest and then pay off a different bond that comes due in the future.

We felt it was the best way to manage our debt, and because we do have all of these bonds coming due at different points in time over the next several years at different interest rates, the Debt Retirement Fund is the most prudent and flexible to deal with it. So the payment will be made this year, in 1997-98. I cannot give him a precise date today, but I will be glad to tell him the day that the money is paid into that fund and welcome him to compliment us on that day when we do just that.

But we will be doing it obviously during this year, and it is the most responsible way to match the timing and the sequence of how we retire our debt through that fund. Mr. Tim Sale (Crescentwood): Mr. Chairperson, I want to start with just a couple of remarks. I was absolutely delighted to hear the Finance minister essentially recant I suppose from years of abuse that took place from 19 85 to 19 88, and then following that time after I left the service of his government and with the health coalition and many other groups raised the issue of federal cuts.

I had the honour of being named by members opposite in a motion to dismiss me and to reduce the office for which I worked to zero as we were battling the Mulroney cuts to health when they were introduced in the 1985-86 federal budget in which this whole train of events, to which the current Finance minister very accurately refers today, goes back to the beginnings of the Established Programs Financing Act Transfer in 1977-78. So I must say, Mr. Chairperson, I was delighted to hear the minister accept even at this late date because confessions are never too late.

As long as one still draws breath, a confession is always welcome. So the fact that the minister has confirmed that the cuts to the cash transfers have been severe, as we claimed they would be from 1985 to the current day, that he has come over to the viewpoint that the federal accounting, whether it is under a Liberal government or a Conservative government in which tax points that were transferred 20 years ago are still charged as though the federal government is providing them, is ludicrous accounting, makes no sense whatsoever.

The tax liability politically and financially for the collection of those dollars falls entirely on the province. as is appropriate, but for the federal government then to claim credit for those dollars being transferred is really ridiculous historically and in a contemporary sense as well. The tax points were indeed transferred. and that is a historical fact. but once you transferred something there was no mechanism. for example. in the act that transferred them for reclaiming them. They were not transferred conditionally; they were not transferred with a sunset clause; they were simply transferred.

So the history is interesting. but to claim it has any present effect is just absolute nonsense.

So I was delighted to hear the Finance minister take essentially the position of the Pawley government in 19 85-86 for which members of that government took a great deal of abuse from his members, particularly the current Premier, and for which I personally took a great deal of abuse over a number of years, claiming first that we could not do mathematics and did not understand arithmetic. that we were overstating the draconian cuts that were in that point in a formation stage but which were beginning to affect our revenues and which were certainly clearly going to escalate to the current level at which we find them.

So I want to just start with thanking the Finance minister for putting the record straight and taking a position that I think is entirely defensible and consistent with the position of the Pawley government. The only difference is that we are now in a position some 12 years later when, if provinces had acted in concert at that time, we might not be facing the kind of crisis in our health care system that we face today. - -

March 26, 1997 LEGISL ATIVE ASSEMBLY OF MANITOBA 885 I want to now ask the Finance minis ter if he could come back and help me understand his answer to the honourable member for Brandon East (Mr. Leonard Evans). By what accounting logic is a draw from a savings account, a trust fund, a stabiliz ation fund, as it is separately accounted in our public accounts-by what logic is that a Manitoba collection in the current year? I have a series of questions, Mr. Chairperson.

I do not necessarily want to get into a long debate on each question, but I am trying to understand by what accounting logic on pages 22 and 23 a draw from an existing funded entity can be considered a current collection in the current fiscal year, thereby ju stifying changing the accounting convention that the minis ter established as far back as 1987-88 when we first began in '8 8-89 to transfer monies first to the Stabiliz ation Fund by borrowing to put money in it and then in later years from the Stabiliz ation Fund.

Could he help me understand the accounting convention by which a draw from a trust fund, a funded entity, can be considered current collections? * (1 530 ) Mr. Stefanson: Mr. Chairperson, first of all, the member for Crescentwood has made me somewhat nervous with his comments on CHST and equal ization and being complimentary and thanking myself and our government and then suggesting that we are consistent with the previous Pawley government. I think anybody who looks at the whole issue of transfers from Ottawa would acknowledge that the previous government was also eroding cash transfers to provinces.

Unfortunately, that became even more accelerated under this government, in fact significantly accelerated under this government. The erosion of the transfers in itself is dis turbing, but the pace of the erosion over these last couple of years by this government, this federal government, is from my point of view absolutely, totally unacceptable and not in the best interests of Canada or Manitoba.

If I can take a minute on this whole issue of tax points, I think that certainly is one area, one issue, that we do agree on in terms ofthe whole issue of the merit of the federal government even attempting to take credit for something that was transferred 20 years ago with no conditions attached and no relationship whatsoever today to the issue of cash transfers. But going back to the member for Brandon East (Mr.

Leonard Evans), just to put it into perspective, federal projections show that even with the increasing value of tax points, even if you accept that argument, Manitoba faces $884 million in transfer losses over five years even after those tax points are included. So whether it is $884 million or $1.1 billion prior to the tax points, that is a huge offload to the Province of Manitoba for support for health, post-secondary education and support to families, from my point of view indefensible for anybody who says they are standing up for Manitoba.

I will be very interested, now that we have provided the deputy Leader of the second opposition party with some data on this, how he can even begin to attempt to justify or defend those kinds of irresponsible actions on the part of the federal government that are out of step with the needs, wants and desires of Manitobans and I believe Canadians. So that certainly is one area where we can agree with the opposition, is how offensive the reduction in transfers are and then the whole aspect of how the federal government tries to roll in this issue of tax points.

I have read letters from federal members of Parliament sent throughout various constituencies trying as hard as they might to ju stify this absolutely unacceptable, irresponsible action on their part, so I look forward to the member for Inkster's (Mr. Lamoureux) comments. But back to the specific question from the member for Crescentwood (Mr. Sale), I felt I had explained it, but maybe I will try parts of it again. We have accumulated a savings account, a reserve account, a stabiliza tion account, whatever one might decide to call it. We view that as a responsible thing to do.

Businesses do that on an ongoing basis as best they can. Households do it as much as they can. In fact, I think Manitobans continue to be amongst the greatest savers of individuals across Canada. Traditionally, Manitoba has a high record of savings in relationship to the rest of Canada. We have done just that in Manitoba. We are faced with a year where we have to deal with this $100- million reduction in Canada Health and Social Transfer. Our link is very direct. I say to the member for

886 LEGISLATIVE ASSE MBLY OF MANITOBA March 26, 1997 Brandon East, it is not a PR move. It is a factual transfer to off set a $1 00-million reduction from the federal government for these important areas. So that is the logic. That is the rationale behind the account, behind the transfer. I guess what we are arguing with the members opposite is the whole issue of presentation in this document on pages 22 and 23 that show the 1 0-year historical

summary. It is not being transferred as a result of deficit reduction. I do not think it is appropriate to make that link because that is not the purpose of the transfer. The purpose of the transfer is very clear. It stops at a $1 00-million reduction from the federal government. So we have shown it as part of the Manitoba collection line. We footnoted it so that people can determine that there is $10 0 mill ion in that account.

If anybody wants to do the comparison, if one is saying, well, what has happened to Manitoba collections, if you want to factor that $10 0 million out, you will see that the remaining Manitoba collections are almost flat. They are up about $14 million over the '96-97 forecast, so, again, I think it is important to understand the purpose of the Fi scal Stabiliz ation account, the rationale for this $1 00-mil lion transfer.

I guess what we are arguing about is presentation. think the presentation is more appropriately shown to link this transfer very much to the purpose for which it was transferred, and that is to of f set the $1 00-million reduction from Ottawa. It is not meant to be a deficit reduction transfer, which was the case in previous years. We have a balanced budget in Manitoba, and this transfer is to off set those reductions. Mr. Sale: Mr.

Chairperson, I do not want to get into a slinging match, but this must be very hard for the Finance minister who is an accountant, who knows the importance of presentation and knows the importance of consistency. If, for example, I could get him to look at '93-94 or '92-93, you had a very significant deficit in those years, and you transferred money from the Fi scal Stabilization Fund to partially off set the deficit. It did not make it balanced; it reduced the apparent deficit. The Auditor, of course, pointed out in Volume 3 that the real deficit was gross of the transfer.

In other words, the deficit was really $766 million less the transfer made to reduce it on Volume 1 basis, ju st $566 million. So there has never been any argument about that until the present time. Surely, the minister is not contending that there is something special about federal revenues among any other sort of revenue. The government gets revenues from a wide variety of sources, publis hes those in the annual Estimates. Sometimes they are up. Sometimes they are down. At no time that I know of do we take specific revenues from specific places unless there is

an act that requires it, and in this case there is not, and apply those revenues to a particular place. We have general revenues, and we have total expenditures. If you did not take the $10 0 mill ion from the Fis cal Stabilization Fund this year. you would have a deficit of roughly $75 mil lion. The minis ter shakes his head. If the minis ter reduced his current revenue by $1 00 mill ion and did not transfer. he would have a deficit.

He would have a deficit of approximately the difference between his shown surplus of $26.8 mil lion and $10 0 million, because he is forced to transfer $75 milli on to his Debt Retirement Fund. So he is basically using the Fiscal Stabilization Fund. as he has said a few minutes ago, to bridge over the last difficult year of federal cuts. The fact is that he had a deficit on the basis of his own figures; otherwise. he would surely not have transferred money from the Fi scal Stabilization Fu nd in order to show a surplus. in order to put it back in the Fiscal Stabili zation Fund.

That would not make any sense at all. Just as what he is doing here does not make any sense in terms of presentation. So I am at a loss to understand how the minister thinks that he has explained this issue. I understand the facts of what he has done. He has used a footnote to show that he has taken some money out of a fund and called it current collections. The fact is that I do not believe that there would be any accountant-and I do not believe the Provincial Auditor will agree that this is an appropriate presentation.

I think the Auditor will be very clear about this, that the minister had every reason, given the fact that he has a bad year from the federal government, and he is very pessimistic about his revenues. He had a deficit. Fine. He is not supposed

March 26, 1997 LEGISLATIVE AS SEMBLY OF MANITOBA 887 to have deficits. He has a Fis cal Sta biliz ation Fund. Take some money out of the Fiscal Stabiliz ation Fund and apply it against his deficit to achieve his surplus of $26.8 mill ion if he wishes and that of his payment to the Debt Retirement Fund, but let him be obvious and transparent about it. Let him not hide it with a footnote, as I have said before, the size of the Progressive Conservative advertising on the bottom of their campaign signs. Let us see what would happen if he actually did that.

If he was consistent with previous years and followed normal accounting conventions and put $10 0 million where the zero is now, it would be very transparent to even ordinary readers who were not skilled in financial statements, and I certainly do not count myself as skilled in reading financial statements, but it would be very clear that we had taken $10 0 million out of the bank in order to put $75 million back in and have a nominal surplus of $26.8 milli on, which will go back into the fund we took the $10 0 million out of in the first place. * (1 540) This is a circle, and the end of the circle is a notional surplus of actually about $1. 8 milli on.

That is all that is here. So I am at a loss to understand how the Fi nance minister as an accountant of some standing and as a Fin ance minister for several years can square this misleading presentation with the historic 10 years now of showing deficit reduction transfers, deposits to Debt Retirement Fu nd, transfers to or from the Fi scal Stabiliz ation Fu nd or transfers from the lottery fund. Those have been the titles in those lines over the last ten years. So if the minis ter can further enlighten me on that, I have heard his explanation, and it is factually obviously what he did.

He took $10 0 milli on, stuck it into current collections, which it is not, put a footnote at the bottom to say that it was there and used it to balance a budget that was otherwise in deficit. I understand that is what he has done. The question is why did he not present it in a transparent and straightforward manner instead of doing it in the way in which he did. My second question to the minister is this: The minister has made a great deal out of talking about the buoyancy of the Manitoba economy.

We have talked about growth in income taxes, talked about growth in sales taxes, talked about his pleasure at the mining community's growth and development, and he made remarks about that in his closing comments in the budget speech. What he appears to be telling Manitobans with his budget, Mr. Chairperson, is that the total operating revenue of the province will fall year over year by something in the order of, what, $80 million and that Manitoba collections will be up very, very marginally, something in the order of $13 million to $14 mi llion. Is not what we have got here, Mr.

Chairperson, really a deli berate underestimating, as he has done this year and in the previous year, of revenues in order to ju stify to Manitoba educators, Manitoba health providers, to low-income parents who have seen food allowances cut, have we not simply got here a paper justifica tion for extreme budgeting to reduce human services in Manitoba while at the same time justifying an apparent draw from a Fiscal Stabiliz ation Fund which I would say the minis ter knows and I know and all of the business community who commented on his budget know will never happen?

This transf er will never happen, because the revenues will be at least $10 0 million higher than he is budgeting, so he will not need to transfer this year and he will stand up like a hero and indica te to people how skilled and competent a budgeter he is because he has underestimated his revenue again. Wow, we have got another big surplus. In the meantime we have cut funding to education while increasing private schools. We have cut funding in the health care system in terms of any real purchasing power.

He stands and says he has increased funding to health but, in fact, with his special warrant, he provided 81 million new dollars to the health care system for the remainder of this year. This budget cuts that level of spending by $66 million. So I have received no explanation in accounting terms that makes any sense concerning the presentation. I am wondering if the minis ter can ju stify on the basis of his third-quarter statement, on the basis of the fact that income taxes alone two years ago are now agreed to have grown by $250 million in one year according to . his third-quarter statement.

Yet this year he is telling us that income taxes will rise by $8 million?

888 LEGISLATIVE ASSEMBLY OF MANITOBA March 26, 1997 While he takes every opportunity that he can find to brag to his business friends and to Manitobans whenever he can get them to listen about the buoyancy of our economy and the growth of our incomes, if they are so good, how in the world can we be showing $8 million more in income taxes this year than last? Why are we not at least showing a 2 percent growth? That would be $32 million. But in fact he knows that the federal income tax revenues in the first nine months of this year grew by 8 percent.

He tells us that Manitoba has outpaced the national economy, but he wants us to belie ve that income tax revenues will grow over his third-quarter estimate by less than half of I percent. The minister is flimflamming Manitobans with budget numbers which he knows and increasingly larger numbers of the rest of us know bear no resemblance to the reality that will come out at the end of the day, and he should be ashamed of that. Mr. Stefanson: The member for Cresce ntwood (Mr. Sale) I guess touched on two main things: the whole issue of the Fiscal Stabilization Fund and then the issue of our economy and our revenues.

So I will take a few moments to respond to both ofthem, Mr. Chairman. First and foremost, I think one of the most important aspects of this budget and last year's budget, the year before budget that Manitobans certainly support and members opposite seem to have difficulty accepting or understanding is for the first time in over 20 years we are not adding one cent to the tax-supported debt here in Manitoba unlike happened during the 1980s when our debt more than quadrupled under the NDP, increased by some $4 billion. Point of Order Mr. Sale: Mr. Chairperson, a point of order.

The minister's own budget points out the error of what he just said. He borrowed $200 million in '88-89 to create a deficit of $141 million. In other words there was a surplus of$58.7 million which actual ly occurred. The Auditor pointed it out, and his own budget points it out. I wish he would simply be absolutely factual with this House instead of bending the truth as he is doing at this point. Mr. Chairperson: Order, please. The honourable member does not have a point of order, it is clearly a dispute over the facts. * * * Mr. Chairperson: The honourable minister, to complete his remarks. Mr. Stefanson: Mr.

Chairperson, if I can carry on. as I have said we have had three budgets now where there has been nothing added to the debt here in Manitoba. The member makes his argument about backing out the $10 0 mill ion from this year's budget. I think a couple of points have to be made on that issue.

If you accept even his argument of backing out the $10 0 mill ion, then you should also be backing out the $75 million because if he is going to make the purest accounting arguments. you go into any business financial statements. retirement of debt is not a business expense; it comes out of the eamings that are generated by this business. either from the eami ngs or from the accumula ted retained earnings of that business. It is not treated as a business expense. Point of Order Mr. Sale: Mr. Chairperson. the minister is an accountant.

He knows that if there is statutory obl igation to make an expenditure, then this is not a vol untary expenditure. It is statutory. It is in the expenditure Estimates, as it must be following the act which he is so proud of. He does not have any discretion; he must pay the $75 mil lion. Mr. Chairperson: The honourable member did not have a point of order. It is clearly a di spute over the facts.

Just for the inf ormation of the members of the committee, points of order are questions raised with the view of calling attention to any departure from standing orders or customary modes of proceedings, not whether or not we agree with what a member is answering or on what the question that the member is putting. On that, we will move back to answering the question. * * * - -

March 26, 19 97 LEGISLATIVE ASSEMBLY OF MANITOBA 889 Mr. Stefanson: Thank you very much, Mr. Chairperson, I do not know if I am going to have to put up with every time the member for Crescentwood hears something that he does not like he gets up on his feet on a point of order. I certainly sat here and listened to him put a lot of things on the record that I both did not like and did not agree with and thought were factually incorr ect, but I was courteous enough to sit and listen to his comments on the budget. * (1 55 0) But he now wants it both ways.

He now refers to the statutory requirement under the Debt Retirement Fund, but does not accept the ability of the government to transfer funds from the Fiscal Stabil ization Fund, which has never been questioned by anybody, never been questioned by the Auditor. All the Auditor does is, in Volume 3, rolls in the Fis cal Stabiliz ation account or the Crown corporations and a whole series of other related government entities, and the Auditor has said they are putting more emphasis on Volume 3.

We continue to put more emphasis on Volume because it is Volume 1 that is supported by the taxpayers of Manitoba; it is Volume 1 that affects whether or not we are added to the tax-supported debt; it is Volume I that is paid for through all of the taxes that we pay in Manitoba and so on. We continue to focus much more on Volume 1 than we do on Volume 3 for all of those reasons, but I think the important issue for Manitoba with this budget, I will argue accounting techniques and accounting process with the member for Crescentwood (Mr. Sale) or anybody else in this House as long they want.

He talks about hiding something. If he thinks something is hidden, then he has been sleeping the last I 0 days, because everybody in Manitoba knows exactly what we did with the Stabiliz ation account. It was covered widely by the media. It has been talked about in all parts of our province. It is certainly not an issue that we are hiding from as a government. In fact, we are very proud that we have been able to set money aside, so that when we have issues to deal with, like reductions from Ottawa, we can use that savings account to offset those reductions and maintain services to Manitobans.

So it is certainly something that we are . proud to speak of and Manitobans are well aware of, but this issue of accounting and presentation, I guess for me at the end of the day what is most important is the reaction of Manitobans and the reaction of the people who have to assess Manitoba. I hope the member for Crescentwood takes the time to read the analysis done by organizations like Nesbitt Bums. I am not going to take the time to read all of Nesbitt Bums into the record, Mr.

Chairman, but they say: With the help of continued spending restraint, debt service relief and tapping the Fis cal Stabili zation Fund to cushion a steep decline in federal transfers, the province is calling for a $27-milli on surplus in 1997-98. It is the third in a row and even larger than the $18 million in black ink projected in last year's budget. They go on to say nothing but positive things about: The Film on government continues in its tradition of delivering sound fiscal management.

It goes on to talk about: that purely and simply to the fact that the province moved earlier than most to put a lid on spending. It talks very complim entary about our fiscal performance and does not in any way call into question how we are treating information in our budget or how we are presenting it or whether or not anybody is attempting to hide anything. CIBC Wood Gundy, same kind of thing, nothing but complime ntary remarks about: Manitoba projects a third consecutive balanced budget and a fiscal plan that continues to cut program spending which offers a mix of targeted tax reductions.

It goes on and on to talk about: It is better than its '96-97 targets. It concludes by saying: We continue to regard the province as a candidate for a credit-rating upgrade over the medium tum-noth ing but positive things about our economy, about our financial performance and our budget. The Bank of Nova Scotia: Fiscal prudence does pay off and Manitoba is the better for it. It goes on again, nothing but positive things, talking about Manitoba. There is light at the end of the tunnel. Manitoba's fiscal performance, the province can now generate sustained budgetary surpluses and so on and so forth.

Here is UBS Securities: Manitoba's '97 budget, balanced forever. We like it. The budget is better than we expected and so on.

890 LEGISLATIVE ASSEMBLY OF MANITOBA March 26, 1997 These are experts in the field. These are accountants, economists, a multitude of experts, analyzing Manitoba's financial performance, economic performance, with nothing but positive things to say about our province. The only people who are negative about our economy and about our financial performance happen to sit across from us in this Chamber. Go out and talk to Manitobans, and they are very proud of both our economy and our financial performance here in Manitoba. So, Mr.

Chairman, I will gladly spend as much time as members want discussing financial presentation, accounting approaches, whatever they want to talk about around that issue. The member for Crescentwood (Mr. Sale) then goes on to talk about our economy, and, again, he seems to want to have it both ways. He is reluctant to admit that we have a strong economy, yet he does acknowledge that we have strong revenues.

So then he sort of says, well, to have strong revenues, maybe they have a strong economy, but then they sit there and moan every time I talk about how strong our economy is performing as though that is not the case, whether you look at exports, retail sales, manufacturing shipments, private capital investment, go on and on. In fact the member for Crescentwood himself on CBC Radio just on March 17, he says and I quote, this is from CBC Radio, the member for Crescentwood: in a period of record growth and jobs and employment.

In a period of record growth and jobs and employment, a quote from the member for Crescentwood himself. Then he stand up here and calls into question whether or not that is the case. Our economy is performing amongst the best in Canada. Our revenue growth is strong in Manitoba, but what the member for Crescentwood fails to realize-he goes back to what we were forecasting for '96-97, and I pointed this out to him on previous occasions, Mr. Chairman, but as much as our revenue is over budget in '96-97 by $1 18 milli on, $1 16 milli on of that is effectively prior-year adju stments.

Our budget '96-97 is within $2.4 milli on of what we were budgeting in terms of actual revenues for '96-97, so when you look at our comparison this year, you should be making the comparison to what we budgeted last year . If you look at our revenue growth in terms of own-source revenues, again, you will see that we are showing significant revenue growth when it comes to issues like our personal income tax and our corporate income tax. Those two alone were showing a 7.5 percent increase in Manitoba income tax. A 7.5 percent increase, if that is not a significant increase, Mr.

Chairperson, I do not know what is, and the member has the gall to suggest that we are not showing reasonable increases in terms of our revenues. Look at the other Manitoba sources. retail sales tax from a budget of $745 million last year to a budget of $785 mil lion this year. Again. in that case of budgeting, we were higher in '96-97. We are budgeting even more than '96-97 in terms of our retail sales ta x. So, once again I think what he fails to understand. and we have had this discussion before. when we prepare the current budget, we go on a line-by- line basis. We look at all of our individual revenues.

We compare what they are in the previous year, what we think is going to happen in our economy. We do it on a line by-line basis. When we use the economic projections. we use that for the medium-term plan starting in 1998 onwards, so for 1998 out, we run an economic model with the economic projections. I do will ingly admit in that economic model \Ve use the more conservative numbers projecting for '98 onward. We do not use the more aggressive economic numbers; we use the more conservative because we believe that that will service us well in the long term. (Mr.

Deputy Chairperson in the Chair) It is interesting to note that the federal government does a similar thing, most provinces do a simi lar thing. The only province, I believe, that was not doing a similar thing was the province of British Colu mbia. I notice in their budget material with the budget they released yesterday, they have made the decision now to be a little more conservative with their projections, and I wonder why .. Look at a province that has been off the mark in '96-97 by hundreds of mill ions of dol lars, off the mark in '95-96. They now are being more conservative in their projection. -

March 26, 1997 LEGISLATIVE ASSEMBLY OF MANITOBA 891 I think most Manitobans take that kind of approach, and we all would much rather be faced with slightly good news and major ch

Document details

Collection	Manitoba — Debates (Hansard)
Citation	36-3-18
Type	hansard
Volume / chapter	36th 3rd hansardpdf 18.pdf
Language	en
Format	pdf
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Identifier	447f6341b66104eb95b12d16057dccec9b382aba

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